Analyzing I-526 Data For Fy2017 - Lee Li - Iiusa Final.pdf

Analyzing Form I-526 Statistics by Investor’s Country of Chargeability for Fiscal Year 2017: What is New and What it Tells Us? investor market, the I-526 filings from Chinese investors showed a 20% annual decrease for two consecutive years since the peak in FY2015, illustrated by Table 1.

U

I-526 FILING GLOBAL MARKET SHARES As illustrated by Figure 1, the number of I-526 petitions filed by investors from China accounted for 77% of I-526 filings worldwide in FY2017. However, China’s market share of I-526 filings was under 80% for the first time since FY2012, declining for a third consecutive year from its peak 89% in FY2014.

In contrast, I-526 filings from India and Vietnam continued to grow by over 45% year-over-year to respectively 587 and 523 in FY2017, an all-time high for these two markets. Additionally, based on the total number of I-526 petitions filed, India surpassed Vietnam Figure 1: Global Market Shares of I‐526 Filings in FY2017, in FY2017 and became Top Countries of Chargebilityof I‐526 Filings in FY2017, the second largest EB-5 Figure 1: Global Market Shares 1: Global Market Shares of I-526 Filings in FY2017, Top Countries of Chargebility investor market for the firstTop FIGURE Brazil, 136 (1%) Countries of Chargebility time.

LEE LI POLICY ANALYST, IIUSA

tilizing the “bitter sweet” machine of the Freedom of Information Act (“FOIA”), IIUSA recently expanded its data library with the latest addition of statistics of Form I-526 (Immigrant Petition by Alien Entrepreneur) by investor’s country of chargeability for fiscal year (FY) 2017. This analysis on the latest I-526 data aims to illustrate the newest trends and developments among the top EB-5 investor markets in FY2017, helping IIUSA members to identify new opportunities in the EB-5 marketplace. In addition, it also showed the increasingly significant impact of the EB-5 visa backlog on the number of new EB-5 investors per year, hindering the EB-5 Program’s capacity of raising investment from qualifying foreign entrepreneurs to support economic development in the U.S. With that, here are the key insights from the latest I-526 statistics analysis:

Brazil, 136 Taiwan, 182(1%) (2%)

Furthermore, EB-5 investors from South Korea accounted for a total of 215 I-526 filings in FY2017, a 38% growth year-overyear. Approximately 182 I-526 petitions were filed by investors from Taiwan and 136 filed from Brazil in FY2017. In addition, the statistics indicated that the total number of I-526 filings from all other 163 countries of chargeability (“ROW, rest of the world”) declined year-over-year by 5% from FY2016 to a total of 970 petitions in FY2017.

Other 163  Countries,  Other 163  970 (9%) Countries,  970 (9%)

South Korea, 215 (2%) Taiwan, 182 (2%) South Korea, 215 (2%) Vietnam, 523 (5%) Vietnam, 523 (5%) India, 587 (5%) India, 587 (5%)

Top five (5) EB‐5  investor markets (other Top five (5) EB‐5  for than China) account investor markets  (other  1,643 or 15% of the total  than China) account for  I‐526 filings in FY2017

1,643 or 15% of the total  I‐526 filings in FY2017

China,  8,771 China, (77%) 8,771 (77%) Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Data Note: Margin of error: +/‐ 6.4%. Prepared by: Lee Li, IIUSA

Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) FORM I-526 FILINGS: RANKINGS, Prepared by: Lee Li, IIUSA NUMBERS, AND GROWTH RATES Table 1: Rankings of I‐526 Filings & Growth Rates by Investor's Country of Chargeability (FY2015 ‐ FY2017)

We found that the number of I-526 filings from China experienced a 20% decline from FY2016 to approximately 8,770 in FY2017. Although China remained by far the largest EB-5

TABLE 1: Rankings of I-526 Filings & Growth Rates by Investor’s Country of Chargeability (FY2015-FY2017) FY2015 Ranking

Country of Visa  Chargeability (COC)

FY2017

FY2016

I‐526 Filings (Number) (YoY Growth)

Country of Visa  Chargeability (COC)

I‐526 Filings (Number) (YoY Growth)

Country of Visa  Chargeability (COC)

I‐526 Filings (Number) (YoY Growth)

1

China

13,530

39.2%

China

10,948

‐19.1%

China

8,771

‐19.9%

2

Vietnam

289

127.6%

Vietnam

404

39.8%

India

587

45.3%

3

India

239

102.5%

India

354

48.1%

Vietnam

523

47.7%

4

Brazil

229

108.2%

South Korea

156

‐31.9%

South Korea

215

37.8%

5

Taiwan

170

60.4%

Brazil

151

‐11.2%

Taiwan

182

20.5%

6

South Korea

167

68.7%

Taiwan

143

‐14.4%

Brazil

136

‐4.9%

Others 163 COCs

1,181

62.9%

Others 163 CoCs

1,025

‐13.2%

Others 163 CoCs

970

‐5.4%

Worldwide Total

15,805

44.5%

Worldwide Total

13,181

‐16.6%

Worldwide Total

11,384

‐13.6%

Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

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Analyzing Form I-526 Statistics by Investor’s Country of Chargeability for Fiscal Year 2017: What is New and What it Tells Us? Map 1: EB-5 Capital Investment by Country of Chargeability (FY2017)

MAP 1: EB-5 Capital Investment by Country of Chargeability (FY2017) U.K., $12M

South Korea, $108M

China, $4.4B

Taiwan, $91M

Iran, $35M

India, $294M

Brazil, $68M

EB-5 Investment* (FY2017)

Vietnam, $262M

Less than $5 million $6 - $25 million $26 - $50 million $51 - $100 million

South Africa, $23M

$250 million or more * EB-5 capital investment estimates are based on $500,000 per I-526 ling in FY2017. Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

The market shares of I-526 filings from India and Vietnam both increased to 5% in FY2017. Overall, China, India, Vietnam, South Korea, Taiwan, and Brazil remained as the six largest EB-5 investor markets since FY2015, accounting for more than 90% of the worldwide I-526 filings annually between FY2015 and FY2017. EB-5 INVESTMENT WORLDWIDE IN FY2017 Based on the number of I-526 petitions filed in FY2017, we also estimated the amount of EB-5 capital investment that could be generated to the U.S. economy by investor’s country of birth. As Map 1 visualizes, the majority of EB-5 investment in FY2017 concentrated from South

East Asia. In particular, China accounted for $4.4 billion in EB-5 capital in FY2017 based on I-526 filings. Additionally, India accounted for $294 million, Vietnam for $262 million, South Korea for $108 million, and Taiwan for $91 million. Brazil was the largest EB-5 investor market in Latin America in FY2017 in terms of I-526 filings, generating approximately $68 million in EB-5 investment, while Iran accounted for $35 million in EB-5 capital, the biggest investor market in the Middle East in FY2017. Furthermore, South Africa remained the top EB-5 investor market in Africa, contributing an estimated $23 million in EB-5 investment in FY2017. Moreover, the largest EB-5 investor market in Europe in FY2017 was the United Kingdom thanks to its investors’ $12 million in EB-5 investment. THE DECLINE IN CHINA VERSUS THE GROWTH IN OTHER COUNTRIES

Figure 2: I‐526 Filings by Fiscal Year, China versus OTC Countries* Total (FY2008‐2017) FIGURE 2: I-526 Filings by Fiscal Year, China versus OTC Countries* Total (FY2008-2017) 14,000

13,530

12,000

China

10,948

OTC Countries 9,722

10,000

I‐526 Filings

8,771

8,000

6,000

4,000 2,965 2,275

2,000

0

1,294 519 717

600 456

651

FY2008

FY2009

FY2010

899

982

FY2011

FY2012

* OTC Countries: All countries of chargeability other than China. Data Note: Margin of error: +/‐ 6.4%.

TOP FIVE EB-5 INVESTOR MARKETS OTHER THAN CHINA Figure 3 presents the annual I-526 filings in FY2016 and FY2017 from the five largest EB-5 OTC countries in FY2017 (India, Vietnam, South Korea, Taiwan, and Brazil). In addition, over the two-year period, approximately 941 I-526 petitions were filed by Indian investors (not including family derivatives); while this number for Vietnamese investors was 927 during the same period. Additionally, South Korea, Taiwan, and Brazil accounted for respectively 371, 325, and 287 I-526 filings in FY2016 and FY2017. With the per-country caps on the annual EB-5 visa allocation, it is important to note the total number of I-526 filings from OTC countries since it will affect the annual availability of EB-5 visas to Chinese applicants who are already waiting in line for their green cards. INVESTOR MARKETS WITH HIGHEST GROWTH IN FY2017

5,480

5,251

As Figure 2 illustrates, I-526 filings by investors from China reached an all-time high in FY2015 with over 13,500 per year and started to decline by more than 2,000 petitions annually ever since, largely due to the increasingly severe visa backlog issue as well as the longer visa waiting time for Chinese applicants. Although the total number of I-526 filings from all countries of chargeability other than China (“OTC countries”) has been increasing since FY2015, the incremental growth of the new EB-5 investors from OTC countries did not offset the significant decline of the EB-5 demand in China that is mostly caused by the visa backlog. In fact, the data shows that I-526 filings from OTC countries increased by only 340 petitions from FY2015 to FY2017; while the decrease of I-526 filings from China was over 4,750 petitions during the same time period. As a result, the total number of new investors who invested in the U.S. through the EB-5 Program declined by more than 15% from FY2015 to FY2017, making it increasingly challenging for the EB-5 industry to raise much needed capital investment to fund economic deployment projects and support job creation in U.S. communities.

1,071

FY2013

2,233

2,613

1,217

FY2014

FY2015

FY2016

FY2017

In addition to the top EB-5 investor markets (such as India, Vietnam, South Korea, and Taiwan), we found that Turkey, Japan, South Africa, and Hong Kong also experienced the highest growth in I-526 filings from FY2016 to FY2017. As Figure 4 shows, the number

Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

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Analyzing Form I-526 Statistics by Investor’s Country of Chargeability for Fiscal Year 2017: What is New and What it Tells Us? Figure 3: I‐526 Filings by Fiscal Year, Top OTC Countries* (FY2016 ‐ FY2017 & Total) FIGURE 3: I-526 Filings by Fiscal Year, Top OTC Countries* (FY2016-FY2017 & Total) FY2016‐2017 Total,  941

1,000

of I-526 petitions filed by Turkish investors increased by over 150% between FY2016 and FY2017, the highest growth among all countries of chargeability. I-526 filings from Japan in FY2017 also increased by 82% from the last fiscal year; while I-526 petitions submitted from Hong Kong grew by 20% yearover-year.

FY2016‐2017 Total,  927

900

FY2016

FY2017

FY2016‐2017 Total

800 700

I‐526 Filings

600 500

FY2016‐2017 Total,  371

400

FY2016‐2017 Total,  325

FY2016‐2017 Total,  287

300 200 100 0

India

Vietnam

South Korea

Taiwan

Brazil

* OTC Countries: All countries of chargeability other than China. Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

Figure 4: Top Eight Countries of Chargeability with Highest Growth Rates in I‐526 Filings,  FIGURE 4: Top Eight Countries of Chargeability with Highest Growth Rates in I-526 Filings, FY2016-2017 I‐526 Filing Growth Rates, FY2016 ‐ FY2017

Worldwide Ranking by I‐526 Filing  Country of  Chargeability

FY2016

FY2017

Change

Turkey

19

11

8

Japan

15

12

3

India

3

2

1

South Korea

4

4

0

Vietnam

2

3

‐1

South Africa Taiwan Hong Kong

14

13

1

6

5

1

11

10

1

0%

20%

40%

60%

80%

100%

120%

140%

160%

152%

Turkey

82%

Japan

66%

India

38%

South Korea Vietnam

29%

South Africa

29%

Taiwan

27%

According to the U.S. Department of State, the EB-5 Final Action Dates for Chinese visa applicants on the Visa Bulletin only advanced by two months (from June 15, 2014 to August 15, 2014) in the entire FY2018. The slow movement on the visa waiting time for China could be partially because of the growing demand of EB-5 visas from the OTC countries, causing less EB-5 visas to be available annually to the Chinese applicants. On the other hand, over 9,720 I-526 petitions were filed by Chinese investors in FY2014, a significant growth of 77% from FY2013, which could be another crucial factor that contributed to the limited movement of the EB-5 Final Action Date for China in FY2018.

Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

Figure 5: Average Approval Rates of I‐526 Petitions, FY2017, Top 10 Countries of FIGURE 5: Average Approval Rates of I-526 Petitions, FT2017, Top 10 Countries of Chargeability Chargeability 100%

97%

I‐526 Approval Rates (FY2017)

95%

93%

Average I‐526 approval rate  worldwide in FY2017: 92%

92% 92%

90%

90% 87%

85%

84% 80%

82%

80% 77%

75%

70%

China

Vietnam

India

South Korea

Brazil

Taiwan

Country of Chargeability Data Note: Margin of error: +/‐ 0.5%.

The latest statistics also shed some light on the average approval rates of I-526 petitions in FY2017 by petitioner’s country of chargeability. As visualized by Figure 5, on average, the approval rate of I-526 petitions filed by investors from China, Vietnam, and Taiwan was 92% in FY2017, the same as the worldwide average level. The analysis also indicated that petitioners from South Korea had the highest average approval rate of 97% in FY2017, while Indian investors had an 87% average approval rate, the lowest level among the top six EB-5 investor markets. Furthermore, the average I-526 approval rates for petitioners from Iran, Russia, Venezuela, and Mexico was between 77% (Iran) and 84% (Mexico), all lower than the worldwide average in FY2017. ESTIMATED EB-5 VISA APPLICANTS QUEUE – CHINA

20%

Hong Kong

AVERAGE APPROVAL RATES OF I-526 PETITIONS BY COUNTRY OF CHARGEABILITY

Iran

Venezuela

Mexico

Russia

Looking ahead, using the I-526 filing statistics from China, we can estimate the number of Chinese visa applicants with a priority date between FY2015 and FY2017 in the EB-5 visa applicants queue. In essence, multiplying the number of I-526 filings by the average approval rate of Chinese petitioners (83% in FY2015

Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

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Analyzing Form I-526 Statistics by Investor’s Country of Chargeability for Fiscal Year 2017: What is New and What it Tells Us? could be more severe in the next fiscal year under the status quo. Not only did the analysis of I-526 statistics for FY2017 generate practical insights of the latest on EB-5 investor markets, but it also illustrates challenges facing the entire EB-5 industry. IIUSA will continue to develop comprehensive

research and quantitative analyses to help our members make educated decisions for their EB-5 business and to inform key industry stakeholders of fact-grounded reports to facilitate meaningful policy discussions. For questions on EB-5 statistics and research, contact Lee Li at [email protected]

Figure 6: Number of I‐526 Petitions Filied and Estimated FIGURE 6: Number of I-526 Petitions Filed and Estimated EB-5EB‐5 Visa Visa Applicants by Fiscal  Applicants by Fiscal Year, China

The result is presented by Figure 6. The analysis indicates that the number of visa applicants from China with a priority date between FY2015 and FY2017 (October 1, 2014 to September 30, 2017) could be approximately 74,513. Furthermore, given the fact that 13,530 I-526 petitions were filed in FY2015 by Chinese investors, it could take an even longer time for the EB-5 Final Action Dates to move from October 1, 2014 to September 30, 2015 for the Chinese applicants. The visa backlog issue

(FY2014-FY2017)

16,000

I‐526 Filings by Fiscal Year

Accumulative Estimated EB‐5 Applicants since FY2015

12,000

10,000

80,000

74,513 

13,530 

14,000

I‐526 Approvals per Year

and FY2016; 93% in FY2017) could give us the estimated I-526 approvals by fiscal year for Chinese investors between FY2015 and FY2017. Then we multiplied the I-526 approval numbers by average family derivatives per principle investor from China (the ratio is 2.8 visas per I-526 petition) to get the estimated number of Chinese visa applicants in the queue. Additionally, we added a 10% attrition rate to our estimates of visa applicants in order to account for the no shows at visa interviews as well as the withdrawals and denials of visa applications.

70,000

60,000

10,948  9,722 

50,000 8,771 

8,000

40,000

6,000

30,000

4,000

20,000

2,000

10,000

0

0

FY2014

FY2015

FY2016

FY2017

* OTC Countries: All countries of chargeability other than China. Data Note: Margin of error: +/‐ 6.4%. Data Source: U.S. Citizenship and Immigration Services (IIUSA Obtained via FOIA) Prepared by: Lee Li, IIUSA

EB-5 DATA IIUSA offers the option for you to purchase the entire data set that consists of I-526 filings from each country of chargeability between FY2016 and FY2017.

With the data set, you will be able to conduct your own analysis on the I-526 trends for all 169 investor markets, discovering new opportunities for your EB-5 business. Purchase the data set on IIUSA website: https://iiusa.org/marketplace/ (Members: $99 | Non-Members: $499). Contact [email protected] for a discount code.

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